Clark Kaericher | Vice President, Government Affairs | 217-522-5512 x 296

May 1, 2020

The Infrastructure Council is an initiative of the Illinois Chamber that brings together Chamber members with a focus on increasing infrastructure investments in a strategic and thoughtful way to boost the overall business climate in Illinois. Our focus is on the public and private systems that are essential to Illinois businesses. 


Good afternoon Infrastructure Council. Welcome to May - my favorite month of the year. May typically features the end of the spring legislative calendar (more on this below), the Indy 500, Cinco de Mayo, my birthday (along with my wife and youngest daughter), and the opening of swimming pools to mark the beginning of summer. In fact, this weekend should have been the Kentucky Derby, but it was delayed along with all other sporting events. I'm having serious sports withdraws and might stage a family race around the back yard so I can place mock wagers and enjoy a mint julep. The dog is the heavy betting favorite, but it's the baby that bites and so my money is on her. Lots of infrastructure-related news this week lets get to it.  
 
Are we there yet? Republicans want to return to legislating 
The House and Senate were not in session this week. It is still uncertain when they will return but the Republicans are starting to become much more vocal about the need to conduct the state's business in Springfield. It started this week when the Senate Minority Leader, Bill Brady of Bloomington, released an open letter demanding to get back to business. He has since done quite an extensive media push in both print and appearing on Chicago networks. Members of the House Republican Caucus, meanwhile, are taking to the judicial system to try and reopen the state.   
 
Despite their consistent calls to reopen and return to Springfield, the Republicans are in the minority and any decision will be up the to Speaker, the Governor, and the Senate President. The Speaker has remained fairly quiet during the pandemic and has shown little desire to return to Springfield anytime soon. Polls have consistently shown the public as gun shy about opening as well, which lessens the pressure to return anytime soon. There has been increasing sourced chatter about a return the last week of May but let me stress that nothing is finalized yet. Remember, a budget passed in June requires a supermajority in favor. A May budget just requires a simple majority. Election year political realities don't completely disappear, even in a worldwide pandemic.   
 
Other Legislative Updates 
One of the legislative victims of session's cancellation is any hope of the Fair Maps Amendment. The deadline for that was this week and with no session, all hopes for getting a better mapping process to the voters in November have been lost. With Democratic leaders that depending on drawing the legislative boundaries to keep their supermajorities, it was a difficult task. Unfortunately, COVID made remap reform impossible. The next map will be drawn like all other ones, and voters will suffer because of it.  
 
Transportation Funding Nosedives  
The COVID pandemic has crippled state infrastructure revenues nationwide. Traffic is down nearly 50% which relates to a decline in MFT revenue of 30-40%. It's not a 1:1 ratio as it's the more fuel-efficient small cars that are parked (semis continue to deliver goods and the trucking companies have been unsung heroes for the supply chain). Across the country the news is grim:  
 
  • Pennsylvania furloughed 6000 DOT employees and Michigan expects furloughs soon 
  • Missouri estimates at $2 billion loss for the Road Program 
  • Kentucky is freezing any new lettings for the next two months 
 
AASHTO has asked the feds for $50 billion just to return to baseline funding. Industry hopes to see new funding in the next federal COVID bill. Any new funding should be rationed according to the existing federal formula. With construction season just beginning, this revenue hit could not come at a worse time.  
 
Illinois has certainly not been spared this revenue hit. Further hampering Illinois is the ratings agencies. Fitch just lowered the city of Chicago's motor fuel tax bonds to junk which makes it much harder to look to the bond markets for funding. This is much more harmful than a typical ratings decrease. Falling to junk locks out many investors who ban any investments in "speculative" or junk grade bonds. Fitch justified the decrease by pointing to a national decline in fuel consumption and Chicago's declining population.  
 
A Fish Fence? Kentucky Looks to Combat Asian Carp 
United States Senate Majority Leader Mitch McConnell has secured funds for his home state of Kentucky to install a bio-acoustic fish fence (BAFF) to combat the Asian Carp problem. The BAFF sends a wall of bubbles, light, and sound from the riverbed to the water surface which scares the Asian carp and prevents them from going any further. This technology will be deployed on the Cumberland River to prevent access to the Locks at Lake Barkley. It is the first use outside of commercial fisheries. The project costs $7 million. As you know, the Asian carp is an invasive species and here in Illinois efforts have been proposed to prevent them from reaching the Great Lakes. If this project is successful, it might be a roadmap for efforts in Illinois. Previous plans using other barriers have been rejected by Governor Pritzker due to their high costs.  
 
Tax Institute Presents: "How to Challenge Audit Assessments and Refund Claim Denials 
Join Paul Bogdanski Partner in the Reed Smith State and Local Tax practice and Keith Staats Executive Director of the Illinois Chamber of Commerce Tax Institute as they discuss the options available to taxpayers to challenge Illinois sales and income tax audit assessments and refund claim denials. They will discuss choosing the proper forum for your challenge, filing deadlines, and procedural rules. Paul and Keith will also give their thoughts on when to litigate when to settle and the impact of the COVID-19 pandemic on how to approach your case. 
 
Articles of Interest 
Leader Brady wants to return to business:  https://wtax.com/podcasts/illinois-senate-republican-leader-bill-brady-9/  
Until next time,  
 
Clark  

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